DITCHING the state pension ‘triple-lock’ protection will only cut costs in the short term because Britons are still failing to save enough for their retirements, experts warned today.

The triple-lock system means the state pensions rise at the rate of inflation, wage growth or 2.5 per cent, whichever is highest.

But because millions of workers are still not saving enough for their old age, experts say the shortfall will have to be plugged by the taxpayer and will be greater than any costs of the current scheme.

The 2.5 per cent underpin was added to the existing double-lock policy of earnings and inflation seven years ago.

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Ditching the state pension ‘triple-lock’ protection will only cut costs in the short term

It was applied in three separate years and is estimated to have added £2bn to the bill so far. Prime Minister Theresa May has refused to guarantee that the protection will be in place after June’s General Election prompting fears the underpin will be abolished in a bid to save money.

Most people will receive a lower state pension as a result of the new single tier introduced last year

Chris Noon - Hymans Robertson

But, research by pensions and benefits consultancy Hymans Robertson has found that a lack of retirement savings means state pension will still need to increase faster than inflation or earnings whether or not the three pronged protection is in place.

Chris Noon of Hymans Robertson, said: “The motivation to remove the triple lock and return to the former policy of double lock would be based on short-term cashflow considerations rather than sensible policy decision-making.

“It will come with big political risks, but more importantly the cost savings to any Government will be insignificant in the context of the pressure building on the state pension due to huge savings shortfalls.”

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Mllions of workers are still not saving enough for their old age, experts say

If, as economists predict, inflation increases, the 2.5 per cent underpin and the subsequent costs will not be applied.

Mr Noon added: “As a nation people are not saving enough for retirement. Three quarters of Defined Contribution savers will not be able to retire on an adequate income.

“The pressure on the state will increase considerably as we see greater numbers retire with these DC pensions over the coming years as large numbers of these people will not have enough to live on in retirement.

“Adding to this, most people will receive a lower state pension as a result of the new single tier introduced last year. By the Government’s own calculations, this will save around £8bn - 0.4 per cent - of GDP per annum by 2060.

“Pension freedoms will put even greater stress on the state pension as people have the ability to access pension pots from age 55 which they can run down. This will result in more people eventually relying solely on state pensions.”

New data from Age UK also out today backed up the Hymans Robertson research.

Analysis of Government figures found nearly three million over-65s – one in four – struggling financially despite an estimated £3.5bn in Pension Credit and Housing Benefit alone going unclaimed each year.

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Theresa May has refused to guarantee that the protection will be in place after June’s Election

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The latest government figures show that pensioner poverty is on the rise – with 1.9million pensioners now living below the poverty line.

The charity is urging older people to find out if they are entitled to some extra financial support.If those people who are eligible for Pension Credit made a claim, it could increase their income by an average of £42 a week or £2,184 a year, the report said.

Caroline Abrahams of Age UK, said: “It is shameful that despite millions of older people struggling financially, around £3.5bn in money benefits remains unclaimed every year when this extra income could make a huge difference to their lives.

“We would urge anyone who is worried about their finances, or an older family member or friend, to get in touch with us for free, impartial information and advice.”